How to trade in after hours. Jon Najarian, co-founder of, compares trading pre-market or after-hours to "a feeding frenzy for New Direction tickets." (For those over 16 or not Jon The bottom line is that anyone who wants to can trade during non-market hours and almost nobody should. The price swings as.

How to trade in after hours

How does after-hours trading impact stock price quotes?

How to trade in after hours. Observing that steep moves in the after-market hours often extend into the following day, the year-old New Yorker made a quick profit on Yelp after the review website reported a surprise second-quarter loss late on July He shorted the stock in extended trade as it dropped to $28 from $33 and then.

How to trade in after hours

Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know.

It is a violation of law in some jurisdictions to falsely identify yourself in an email. All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf. The subject line of the email you send will be "Fidelity. In the US, the opening bell is at 9: Eastern Time and the closing bell is at 4: Unfortunately, many investors are busy with life during those hours. But did you know you can place orders when the market is closed?

After-hours trading refers to the period of time after the market closes and during which an investor can place an order to buy or sell stocks or ETFs. Pre-market trading, in contrast, occurs in the hours before the market officially opens. Together, after-hours and pre-market trading is known as extended-hours trading. The rules for extended-hours trading differ from the rules during normal trading hours. Moreover, each brokerage firm may have different rules pertaining to trading during non-market hours.

Also, all orders must be limit orders; orders in the pre-market session can only be entered and executed between 7: Eastern Time, and short sale orders are available only from 8: Orders in the after hours session can be entered and executed between 4: Further, when granting customers the permission to trade during extended hours, most brokerages require their customers to agree to the Electronic Communication Network ECN user agreement and even discuss it with a representative so that they understand the risks associated with extended-hours trading.

ECN refers to one or more electronic communications networks to which an order may be submitted for display and execution by a broker. ECNs electronically match buyers and sellers to execute limit orders. Extended-hours session orders may also be executed by a dealer at a price that is at or better than the ECN's best bid or offer. The main benefit of extended-hours trading is that it extends the availability to trade beyond the traditional window i.

Extended-hours trading has become more popular with active investors in recent years because it allows for trades to be made at more convenient times. For example, traders can use after-market trading to respond to news events that occur outside of normal market hours.

Because many public companies release quarterly earnings after 4: Eastern Time, investors have the opportunity to immediately place a trade following an announcement in order to manage their position, rather than be forced to wait until the market opens the next day. On the other hand, investors may make pre-market trades upon getting news. A good example is the highly significant monthly U.

Eastern Time on the first Friday of every month. Rather than having to wait until the market opens at 9: Of course, there is no guarantee an order will be filled in extended hours. The biggest risk associated with extended-hours trading is liquidity, or lack thereof.

The vast majority of trading occurs during normal business hours, meaning that there is more demand for stock you are selling, and more supply of stock you want to buy. The primary implication of lower liquidity during extended hours is that the size of bid-ask spreads may be impacted. This can be costly. If you wanted to sell the shares right away, you would have to accept less money for the shares than you might be able to get during normal market hours, when there is more liquidity in the market.

Other risks include price volatility which tends to be much higher in extended-hours trading than during normal market hours , stronger competition greater percentage of professional traders who are more skilled at seeking best price execution for themselves , and trading limitations imposed by your broker which can vary.

While this list is not an exhaustive list of all the risks associated with trading during extended hours, they are among the most important factors to consider.

At Fidelity, you can trade listed equities and OTC equities—excluding pink sheets and bulletin board stocks i. Whether you choose to trade during extended hours depends on your investing style, objectives, and tolerance for risk. Extended-hours trading is not for everyone, so you may want to learn more about it and discuss the risks and potential advantages with an investment professional before trying it out. But if you see advantages in being able to trade when the market is closed, you may want to investigate extended-hours trading.

Read additional information about the benefits and risks of after-hours trading. Get a weekly subscription of our experts' current thinking on the financial markets, investing trends, and personal finance. Please enter a valid name. First and Last name are required. Full name should not exceed 75 characters. Enter a valid email address. Email address must be 5 characters at minimum. Email address can not exceed characters. Please enter a valid email address. Thank you for subscribing.

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Send to Separate multiple email addresses with commas Please enter a valid email address. Your email address Please enter a valid email address. Next steps to consider Research stocks, ETFs, mutual funds. More on after-hours trading. You can place brokerage orders when markets are opened or closed. However, orders placed when the markets are closed are subject to market conditions existing when the markets next open.

Any equity requirement necessary for trade approval will be based upon the most recent closing price of the security that you intend to buy or sell. Because of fluctuating conditions, the ultimate execution price may differ at times from the most recent closing price. When placing orders when markets are closed, carefully consider any limitation you may wish to place on the transaction.

Fidelity reserves the right to refuse to accept any opening transaction for any reason, at its sole discretion. See more information about trading during extended hours.

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All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf. The subject line of the e-mail you send will be "Fidelity. Your e-mail has been sent. Related Articles How to sell covered calls This options strategy can potentially generate income on stocks you own. Extended-hours trading Here are the pros and cons of trading when the market is officially closed. Put a collar on this market This advanced options strategy is designed to limit losses and protect gains.

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